The ECB Should Stop QE Before Draghi Causes A “Financial Crisis”, German “Wise Men” Warn

Back in July, Germany’s economic ‘wise men’ took a look at bailout ‘success’ and ‘failures’ and came to a rather disconcerting conclusion. Here’s what the Council of Economic Experts said in their report:
A permanently uncooperative member state should not be able to threaten the existence of the euro. In view of this, the Council of Economic Experts recommends that the withdrawal of a member state from the currency union must be possible as an utterly last resort. Yes, ‘a permanently uncooperative member’, and by ‘uncooperative’ they of course meant states which do not subscribe to the German brand of fiscal rectitude and who may seeking to rollback previously agreed upon austerity measures. To be sure, there’s a whole to be said for honoring one’s commitments, especially when those commitments came with billions in loans attached to them, but the report served to underscore the extent to which Berlin effectively controls the eurozone by wielding the purse string.
Anyway, one thing we know about Germany is that officials have a low tolerance for anything that even looks like irresponsible fiscal policy or other types of shenanigans that could, in the end, create crises which is why no one was surprised to see Wolfgang Schaeuble give a number speeches over the past several months in which in incorrigible finance minister derided money printing and ZIRP.
Well don’t look now, but the same Council of Economic Experts is out with their latest annual report and they are not happy with ECB QE and contend that the further expansion of the central bank’s balance sheet could risk sparking a new financial crisis. Here’s more:

This post was published at Zero Hedge on 11/11/2015.

4 Harbingers Of Stock Market Doom That Foreshadowed The 2008 Crash Are Flashing Red Again

So many of the exact same patterns that we witnessed just before the stock market crash of 2008 are playing out once again right before our eyes. Most of the time, a stock market crash doesn’t just come out of nowhere. Normally there are specific leading indicators that we can look for that will tell us if major trouble is on the horizon. One of these leading indicators is the junk bond market. Right now, a closely watched high yield bond ETF known as JNK is sitting at 35.77. If it falls below 35, that will be a major red flag, and it will be the first time that it has done so since 2009. As you can see from this chart, JNK started crashing in June and July of 2008 – well before equities started crashing later that year. A crash in junk bonds almost always precedes a major crash in stocks, and so this is something that I am watching carefully.
And there is a reason why junk bonds are crashing. In 2015 we have seen the most corporate bond downgrades since the last financial crisis, and corporate debt defaults are absolutely skyrocketing. The following comes from a recent piece by Porter Stansberry…
So far this year, nearly 300 U. S. corporations have seen their bonds downgraded. That’s the most downgrades per year since the financial crisis of 2008-2009. The year isn’t over yet. Neither are the downgrades. More worrisome, the 12-month default rate on high-yield corporate debt has doubled this year. This suggests we are well into the next major debt-default cycle.
Another thing that I am watching closely is the price of oil.
A massive crash in the price of oil preceded the stock market crash of 2008, and over the past year we have seen another dramatic crash in the price of oil.
Many had been expecting the price of oil to bounce back, but instead we are seeing new downward momentum. In fact, according to Business Insider the price of U. S. oil briefly dipped below $43 a barrel on Wednesday…

This post was published at The Economic Collapse Blog on November 11th, 2015.

This Is How Fossil Fuels Die

Some recent stories from, of all places, Texas, offer the first clear glimpse of the coming energy revolution. The short version: Combine wind at night, solar during the day, and next-generation batteries, and you get an energy economy that doesn’t need oil, coal, or gas.
Wind power is so cheap at night in Texas, some companies give it away (Grist) – In Texas, you could have a full-out appliance party at your house – with the dishwasher whirring, oven broiling, and laundry spinning – and as long as it’s after 9 p.m. and you’re on the right electricity plan, the extra energy use won’t cost you a thing.
More than 50 Texas utility companies are offering plans that give away free electricity at night, thanks to bountiful wind power, among other factors. The New York Times explains:
… Texas has more wind power than any other state, accounting for roughly 10 percent of the state’s generation. Alone among the 48 contiguous states, Texas runs its own electricity grid that barely connects to the rest of the country, so the abundance of nightly wind power generated here must be consumed here.
Wind blows most strongly at night and the power it produces is inexpensive because of its abundance and federal tax breaks. A shift of power use away from the peak daytime periods means lower wholesale prices, and the possibility of avoiding the costly option of building more power plants.
Companies in other states have dabbled with incentivizing electricity use during off-peak hours, but the Lone Star State is unmatched in this huge energy experiment. And it makes sense: After all, there was that one September night in Texas when the price of electricity dropped below zero – meaning that the state’s power producers actually paid to have energy taken off their hands.

This post was published at DollarCollapse on November 11, 2015.

“Currency War By 1000 Cuts” Continues – PBOC Weakens Yuan For Longest Streak Since Lehman

Amid warnings from Daiwa Capital Markets that policy-makers “will sacrifice Yuan stability” in order to manage the deterioration in the economy (trade and industrial production data confirming the weakness), The PBOC weakened the Yuan fix for the 8th straight day. This is the longest streak of weakness since August 2008.
As Bloomberg notes,

This post was published at Zero Hedge on 11/11/2015.

Is the Troika About to Lose Control of South-Western Europe?

The Price of ‘Austerity’
Passos Coelho, who was until Tuesday Prime Minister of Portugal, knew ‘what to do.’ After signing along the dotted line for a 78 billion bailout he embraced the Troika’s austerity agenda with abandon. Public spending was slashed, taxes were hiked, wages were cut, and a whole gamut of public assets and services were privatized.
As they say in Brussels these days, no pain, no gain. After four years of excruciating belt-tightening, Portugal was apparently back on the mend, despite its public debt almost doubling since 2008. Its economy had been through the grinder but it had come out the other end in much leaner shape. The public deficit had shrunk from 11% in 2011 to 3% today.
Unemployment had also fallen, and kept falling month after month, to the point where it was getting monotonous. Until two months ago, that is, when it shot back up over 14%. Then came the bomb shell: the country’s Ministry of Statistics announced in a rare moment of candor that unemployment, in an ‘extended sense,’ was actually around 22%. As Deutsche Welle reports, the Portuguese government had been doctoring the figures to keep the European institutions (i.e. the Troika) happy:

This post was published at Wolf Street by Don Quijones ‘ November 11, 2015.

Aussie Bonds Crushed After “Everything Is Awesome” Best October Job Gains Since 2007

China must be fixed because ‘seasonally-adjusted’ Aussie full-time employment just surged 58,600 MoM (almost quadruple expectations of a 15k rise). This is the best monthly gain in jobs since September 2012 and best October since 2007 – which all makes perfect sense. The resultant bloodbath in Aussie bonds (3Y 13bps to 6 month highs is worst day since Jan 2014) is all too real however. The question is – will this “good news” be jawboned down by RBA in order to give them some easing room?

This post was published at Zero Hedge on 11/11/2015.

Gold Daily and Silver Weekly Charts – The Road Ahead

It was more back and forth with gold and silver today.
I thought I had already given a fairly complete overview of what I think is happening in the precious metals markets. Perhaps I need to repeat it with just a little embellishment.
And just for grins, although it does contain some satirical exaggeration just for effect, the cartoon to the right is pretty much how I conceive our current situation and the real economy. Our financial problems cut right to the bone of who we are and how we are conducting ourselves as a society.
We have just seen an historically significant decline in the precious metals in terms of days lower without relief. And we have seen a remarkable rise in the US dollar index against the Euro and the Swiss franc that cannot possibly be good for the real economy of the US, when every other developed nation is trying to devalue their currencies to stimulate their exports and inhibit imports.
I believe that a portion of the gold selling in particular is an effort to knock down the open interest in gold for December. Why? Because of the incredibly high ratio of open interest to deliverable gold, which I publish frequently and was among the first to do so, although Nick Laird is the data wrangler pre-eminent on this. If there was any serious attempt for holders of those contracts to stand for delivery, even JPM, which has been obviously building up its stores of gold to act as the ‘fixer’ in that market, would not be able to cover the demand.
JPM was consistently taking delivery for their house account in gold, and just transferred 70,000 ounces over from Nova Scotia’s warehouse, from whom they had been taking delivery.

This post was published at Jesses Crossroads Cafe on 11 NOVEMBER 2015.

Silver Imbedded Keyboard Can be Cleaned in the Dishwasher

The first backlit, rigid plastic, waterproof keyboard constructed with silver-based antimicrobial protection to limit transmission of germs, bacteria and mold is now available, according to WetKeys Washable Keyboards, an Atlanta, Georgia-based company.
The Silver Seal Glow keyboard uses waterproof LED lighting adjustable in 3 levels to backlight keys, making it useful for low-light environments such as operating suites, laboratories and hospital wards. The keyboard is completely submersible, and can be cleaned using healthcare grade disinfectants, or even in an automatic dishwasher, officials say.
They cite studies showing that up to 25 percent of hospital keyboards are contaminated with the Super Bug MRSA, a strain of staph bacteria resistant to antibiotics.

This post was published at GoldSilverWorlds on November 11, 2015.

The Economic Collapse Nightmare Continues, The US Gov Statistical Data Is Meaningless – Episode 815a

The following video was published by X22Report on Nov 11, 2015
UK sales decline as the global economy slows to a halt. Canada’s economy is imploding in the oil and real estate market. Retail in America declines further Macy’s reports sales are a disaster. The middle class is broke and many cities and states are showing a decline in sales. US mortgage applications decline once again. Baltic Dry Index declines below 600 points. Social Security spending hit an all time high of $944,143,000,000.

Goldman Maps Fed’s “Flight Path”, Sees Steeper Trajectory For Rates

On Tuesday, we got the latest egregious example of regulatory capture with the appointment of Neel Kashkari to the Presidency of the Minneapolis branch of the Eccles cabal. Here’s what we said:
At a certain level, the staffing of government agencies, regulators, and other public sector bodies with former Wall Streeters and various bulge bracket bigwigs has become so ubiquitous that it’s hardly even news. Still, it’s worth paying attention to the dynamic because losing track of who’s really running things is a bad idea if you want to understand why it always seems like regulatory outcomes are never commensurate with the crime and if you think monetary policy and all types of other high level decisions regarding the economy are conducted at the behest of those who are ultimately beholden to the bankers.

This post was published at Zero Hedge on 11/11/2015.

Warning: The S&P 500 Is NOT in Good Shape

I got a great question from one of my Cycle 9 Alert subscribers recently. Chuck C. asked:
‘It’s been said most stocks are in a correction, so why are the averages near all-time highs?’
Chuck’s right! Most stocks are in a correction. And, yes, the S&P 500 index isalso near its all-time highs. (Psst… that’s a warning sign!)
But stock market averages are only ‘healthy’ when a majority of individual stocks are healthy. We have to see both the stock market index rising… anda majority of individual stocks rising to know the market is bullish and healthy.
So if a majority of individual stocks are falling… even if the stock market index is rising…
Then trouble is likely ahead.

This post was published at Wall Street Examiner by Adam O’Dell ‘ November 11, 2015.

Macy’s Massacre – 3 Years Of Wasted Buybacks Ends Financial Engineering Dreams

Macy’s is down over 13% today, pushing towards a sub-$40 handle – the lowest since February 2013 – after lowering guidance and disappointing a market full of hope (and hype) that retail is back (remember, all the retail hiring last Friday). However, that is not the most prescient issue as 3 years of buying back billions of dollars of Macy’s stocks – to financially-engineer earnings to ensure executive compensation is satisfactory – have been completely wasted. And worst still, the additional debt added to fund the total failure in timing of buybacks has now sent Macy’s credit spiking to multi-year highs(as the stock tumbles).
“No Brainer” – Macy’s actually increased their buyback pace last quarter alone – spending $900 million on stock at an average price of $53.89, a loss of $230 million of that “investment”

This post was published at Zero Hedge on 11/11/2015.

TDV: Collin Kettell of Palisade Capital on Why Now Is The Time To Buy Gold Mining Stocks

The following video was published by TheDollarVigilante on Nov 11, 2015
Jeff interviews Collin Kettell of Palisade Capital, topics include: the current state of the market in gold and silver mining stocks, mining stocks have never been cheaper, getting close to the right time to be investing in these stocks, 2016 to be an excellent year for these stocks, many stocks at an all time low and set to rise exponentially, it is still a very risky business as only one in five hundred drill sites will become a mine, an analysis of some detailed market charts, The Dollar Vigilante Internationalization and Investment Summit.

SP 500 and NDX Futures Daily Charts – The Tension on the Tape – My ‘Agenda’

‘The wind in the wires made a tattle-tale sound When the wave broke over the railing And every man knew, as the captain did too ‘Twas the witch of November come stealin.’
Gordon Lightfoot, The Wreck of the Edmund Fitzgerald
This nautical map of eastern Lake Superior shows how close the Edmund Fitzgerald was to the safety of Whitefish Bay in the lee of the north wind when it foundered. It really was only about fifteen miles from safer waters.
Stocks were in an edgy trade today, as they continue to digest their outsized gains from the last month. The SP futures rallied, almost non-stop, from 1860 to 2110, where they failed, at least for now, to set a higher high.
The big questions are twofold.
First, are stocks and bonds being set up for a serious correction after a fairly impressive run higher in paper asset prices? And secondly, can the real economy continue to hold a weak pulse of recovery in the face of a much stronger dollar and increasing interest rates, even while the rest of the global economy continues to falter?
I do not have the answer to this, obviously. And hardly anyone else does as well, especially those who would sell their judgement on it to you. They might feel they have a good grasp of it, but the question then is why are they not putting their own money on it, rather than getting paid to watch you play yours on their opinion?
As the question arose elsewhere about this cafe, my ‘agenda’ here is to share my thoughts on the markets in the hopes of getting back more knowledge, and also to subject my thoughts to the rigor of the printed word. It is easy and rather sloppy just to think these things without committing them to paper, and public exposure.

This post was published at Jesses Crossroads Cafe on 11 NOVEMBER 2015.

Warning: A Fed Rate Hike Will Doom These ‘Zombie’ Companies

When the Fed rate hike that nearly everyone expects finally happens, a lot of U. S. companies that have been surviving on cheap debt will get pushed into oblivion.
Remember, the U. S. Federal Reserve hasn’t raised interest rates since 2006. And it has kept rates near zero since the end of 2008. In that time, corporate America has grown addicted to cheap debt.
Corporate treasurers refinanced $1 trillion worth of debt each year between 2012 and 2014. Some of that debt has gone to finance acquisitions. Some has gone to finance returns to shareholders in the form of stock buybacks and increased dividends.
But weaker companies – those whose high-yield debt is known as ‘junk’ – have been borrowing just to keep the doors open. And borrowing by these companies was up 21% in the first six months of the year from the same period in 2014.

This post was published at Wall Street Examiner by David Zeiler ‘ November 11, 2015.

The Legendary U.S. Consumer Is Out Of Cash In These Cities

Today Macy’s dropped a bomb with results that were nothing short of abysmal, and which confirmed that not only the “legendary” U. S. spender, the driving force behind 70% of US GDP, but also foreign shoppers have hunkered down to a greater extent than at any other time during the so-called recovery.
Quickly the apologists said that this is not an indicator of overall consumer weakness as much as it is lack of retail strength: the argument being that more spending goes to online markets.
There is just one problem: if that were the case, one would see a pronounced deterioration in spending uniformly across US cities. However, not only is that not the case, but there is a very clear distinction in which cities US consumers are doing well, versus cities in which they have been tapped out.
We know this courtesy of Bank of America’s latest credit and debit card usage data which showed a dramatic divergence among the top 10 US metro areas.
As the chart below shows, there is a very distinct slow down in spending in various cities such as Atlanta and Washington DC, both of which saw a sudden and unexpected plunge in retail sales in October compared to their prior 6 month average; sales in Houston on the other hand continue to weaken – the region has experienced essentially no growth in nominal sales over the prior six months. On the upside, the US financial centers, Boston and New York, were the strongest as one would expect.

This post was published at Zero Hedge on 11/11/2015.

Growing Industrial Demand for Silver

There is a growing demand for silver as industry has turned increasingly to advanced technological products and systems that require the metal’s unique qualities, according to speakers at the 2nd Silver Industrial Conference.
The Silver Institute recently conducted the conference where executives and experts from many industrial sectors – including electronics, the textiles and chemical industry, regulatory and financial firms – came together in Washington, D. C. on October 29.
In his introductory remarks, Michael DiRienzo, Executive Director, the Silver Institute, said the reflective and conductive qualities of silver were superior to other metals as today’s high tech products advanced onto the market.
However, it isn’t only in advanced high tech or electronic products where silver plays an essential role. The metal is a critical element in the production of ethylene oxide (EO), a basic chemical vital in the manufacture of commonly used products such as polyester fiber.
Silver is also a vital element in solar energy, said Erica Rannestad, a Senior Analyst for GFMS Thomson Reuters, a global research firm. The metal, she noted, was an indispensable part of the solar energy chain.

This post was published at GoldSilverWorlds on November 11, 2015.

NOV 11/HUGE DEFAULTS COMING TO CHINA AS WELL AS DEFAULTS IN USA ENERGY PATCH/HUGE WITHDRAWAL OF ANOTHER 3 TONNES OF GOLD AT GLD/AGAIN NO SILVER LEAVES SLV/ECB READY TO DO BATTLE WITH NEW GOVERNME…

Gold: $1088.20 up $0.30 (comex closing time)
Silver $14.36 down 6 cents
In the access market 5:15 pm
Gold $1086.00
Silver: $14.31
First, here is an outline of what will be discussed tonight:
At the gold comex today, we had a very poor delivery day, registering 0 notice for nil ounces. Silver saw 0 notices for nil oz.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 208.72 tonnes for a loss of 94 tonnes over that period.
In silver, the open interest surprisingly fell by a considerable 2843 contracts despite silver being down by only 6 cents in yesterday’s trading. The total silver OI now rests at 162,435 contracts In ounces, the OI is still represented by .812 billion oz or 116% of annual global silver production (ex Russia ex China).
In silver we had 0 notices served upon for nil oz.
In gold, the total comex gold OI fell by 378 contracts to 436,426 contracts as gold was only down by $0.30 yesterday. It seems the modus operandi of the bandits is to liquefy gold/silver OI as be approach first day notice on Monday, November 30. We had 0 notices filed for nil today.
We had a huge withdrawal in gold inventory at the GLD to the tune of 3.00 tonnes / thus the inventory rests tonight at 663.43 tonnes. The appetite for gold coming from China is depleting not only gold from the LBMA and GLD but also the comex is bleeding gold. Our 670 tonnes of rock bottom inventory in GLD gold has been broken. It looks to me that China has taken the last amounts of physical gold from the GLD. I guess the only place left for China to receive physical gold, after they deplete the GLD will be the FRBNY and the comex. In silver, no change in silver inventory / Inventory rests at 313.681 million oz.
We have a few important stories to bring to your attention today…

This post was published at Harvey Organ Blog on November 11, 2015.